The United States and Japan will step up their defence cooperation to deal with the threat from nuclear-armed North Korea as tensions in East Asia remain high, officials from the two allies said on Thursday.

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Mr Sargent said without changes to labour markets other action on the Brisbane G20 agenda, such as boosting trade and investment in infrastructure, would be hampered.

"It's not going to be easy but I don't think we are going to have a lot of choice," Mr Sargent said.

Robert Milliner, the B20's "sherpa", gave the example of a cinema chain owner who was compelled due to workplace laws to offer eight-hour shifts when university students were only seeking two or three hours of work a day.